Delta Two now owns more than 25%
Delta Two, the investment vehicle of the Qatari royal family, has increased its stake in Sainsbury's to more than 25 per cent.

The move is significant, because if the group buys more than a 29 per cent shareholding it has to clarify its position on a takeover of the UK's third-largest supermarket.

Delta Two has bought 123 million Sainsbury's shares at 595p a share - an investment of£732 million. However, some analysts are unclear about why the Qataris are purchasing such large volumes of Sainsbury's shares. Seymour Pierce analyst Richard Ratner said: 'We are not certain what they see in this, other than trying to get the company to run itself in the listed arena as if it were a private equity play by putting the property into a REIT [real estate investment trust].'

Sainsbury's board rejected a bid by the CVC-led private equity consortium in April, which was believed to have been made at 582p.

Ratner said: 'If this [increased stake] is the prelude to a bid, one must remember that a 582p indicative offer has already been turned down by the family. At that level, the IRR [investment rate of return] was about 15 per cent - don't forget the pension fund. We cannot see, unless one lets vanity beat sanity, what higher figure would make sense.'